One of the more peculiar measures to come out of the Federal Budget is the announced development of a $20 billion Medical Research Future Fund, which is to be funded entirely from the $7 co-payment on GP visits, a $5 increase in Pharmaceutical Benefits Scheme prescriptions ($0.80 for concession holders), and savings from medical expenditure.
The fund, which is expected to be “the biggest medical research endowment fund in the world” within six years, will be capital protected, with interest earnings used to fund medical research and discover “cures of the future”.
According to the Budget Papers:
The Fund will facilitate Australia maintaining a world class medical research sector, with access to cutting edge innovation and clinical breakthroughs in our hospitals — the underpinnings of the health system of the future…
This investment, to be managed by the Future Fund Board of Guardians, will help to ensure Australia can continue to advance world leading medical research projects, attract and retain first class researchers and deliver improved health and medical outcomes for all Australians.
Distributions for medical research are expected to reach some $1 billion by 2022-23, effectively doubling the government’s direct medical research funding (see next chart).
After thinking about this issue since last night’s Budget speech, I am struggling to formulate a position on whether I support such a Fund.
Hypothecating fuel excise increases back into roads makes perfect sense, and is sellable politically. Most dislike paying more tax, but the pain is far more bearable if the funds are used in ways that are visible and from which we all benefit.
The position is far more blurry when it comes to the Medical Research Future Fund, which offers fewer visible or direct benefits to users of the medical system, with the increased costs instead flowing into what appears to be an obscure slush fund.
As to the merits of establishing the world’s biggest medical research fund, how is it a superior investment to, say, keeping medical services more affordable, investing in increased medical services in regional and remote areas, or any number of other worthwhile initiatives?
While I can acknowledge some wider economic benefits from establishing such a Fund – particularly by boosting the nation’s intellectual property, allowing opportunities for commercialisation, and potentially weaning us off the US pharmaceutical industry (who, let’s face it, are renowned for gouging) – why possibly deprive people of actual medical attention in the process?
The whole policy is a tough sell politically to an electorate that is being asked to pay more for medical services, but will receive few visible benefits in return.